By Steve Outing
My recent E&P column, “Forget Micropayments — Here’s a Far Better Idea for Monetizing Content,” generated a ton of conversation, blog items, and mentions in news articles around the world. I’m pleased with that, because a wave had been building of (mostly older) prominent journalists and publishers recommending that news organizations start charging for their content — and micropayments was seen as the most promising technology to achieve that.
That is SUCH a bad idea that I felt like the discussion needed to turn to alternatives. I had recently learned of one that I think shows promise.
The column and the overall debate about whether news companies can save themselves by all starting to charge for their content online (never mind the loss of audience and resulting loss of ad revenues), or whether that will lead to their demise, led to much praise for and some criticism of the concept behind a company I talked about in the column, Kachingle. A brief description of the Kachingle model and a lengthy comment thread debate can be found on my previous blog item.
I need to respond to some of the criticisms, so here goes…
1. Some critics interpreted my intention as saying that a contribution model covering and distributing money across many online content providers would save news organization budgets, alone. No, the Kachingle model is just ONE revenue source that newspapers and other news organizations using the Web should use. Many get money from participating in Google AdSense, for example; that has no effect on the rest of a site’s business model. The main way that most news websites will earn enough money to survive will continue to be advertising. A main focus for them should be on reinventing their ad models, because selling banner ads and classifieds advertising is broken. Kachingle is just another revenue source.
2. Charging for content is a dead horse. Most news content on the Web has been free for 15 years, and attempts to charge for commodity news content have failed again and again because what most news companies produce is easily replaceable, for free, with a few clicks elsewhere. Even if the network contribution model brought in a modest amount of money to news publishers, it would be better than the negative revenue growth that likely would result from trying to charge for Web news content.
3. I got notes from a few people calling the Kachingle model of online users supporting their favorite websites via a central, nearly frictionless system as “nationalization” of news publishers. What?!! I don’t even know how to respond to that crazy charge. See point No. 1 for why that notion is completely without merit.
4. The Kachingle idea gets a thumbs down from some people because they don’t like the idea of voluntary. Most people will be cheapskates and refuse to sign up for a monthly payment for content when they can get it for free, the critics say. Alan Mutter, in his blog Newsosaur, did a rough calculation of what a scaled-up Kachingle model might bring to publishers, based on a 2% take-up rate by web content consumers, and found that while it could bring in real money, it’s not enough to save the downtrodden newspaper industry, for example. He dismissively titled his blog post “Tip-jar journalism: Slim pickin’s for pubs.” (Actually, I don’t think Mutter understands the system, since he says he “assumed that site visitors would click the Kachingle button on 2% of the pages.” Kachinglers click a website only once to financially support it, then the site gets credit whenever a supporter subsequently visits on a single day; it’s not counting page-views.)
I take issue with the term “tip jar,” because many sites have tried putting individual tip jars on their pages, and success has been limited. A system that encourages every website to individually ask for money would be a failure. Who wants to feel like their getting panhandled wherever they go on the Web? I’m talking about something different, beyond the tip jar.
I think the challenge (and the solution) is in how Kachingle accounts are marketed. Forget the “tip” terminology. Tell people that if they want quality news content to continue to be available on the Web, they need to pay for it. Tell them there’s a system that makes it super-simple for them to assign $5 a month (or whatever amount they choose) to support just the websites and blogs that they like and would like to see continue.
Publishers could even provide incentives for Kachingle members (whether they support your specific site or not). If a site visitor is a Kachingle account holder, give them access to some online goodie (e-book, archive access, whatever). If a visitor is a Kachingle member AND supports your site financially via the system, perhaps there’s an extra goodie or service made available to them. (I offer this as an idea, but frankly I haven’t thought it through; there could be unintended consequences, for example, of rewarding Kachinglers who financially support you.)
Also, there an entire field of persuasive technology that can be applied to this problem of web publishers, bloggers, and Kachingle working together to encourage the behavior we want: Pay $5 a month or whatever you wish to support your favorite bloggers and websites. Notice how persuasive technology is described in the Wikipedia link above: “intentionally changes attitudes or behaviors through persuasion and social influence.” Perhaps the Stanford Persuasive Technology Lab can be of assistance in tackling this problem.
Mutter’s 2% figure can be increased to a point where it means significant money for small and large online publishers. An important and effective marketing tool is “social proof,” where a website (and this applies to all sorts of products and services in the virtual and real worlds) brings in new customers by demonstrating how many other people are already using it. Kachingle builds in that social proof with tools that allow you to see how many people are supporting a site via that system. You can even see who supports a specific site financially (assuming a supporter has a privacy setting adjusted to allow that). A site can even show off how much money its fans are contributing via Kachingle (another social proof measure).
A Norwegian newspaper website columnist wrote about my column and explained the Kachingle concept recently, and posted a poll of his readers. Of the nearly 2,000 respondents, 22% said they would be willing to pay a voluntary monthly content fee to support their favor sites and blogs. Just to speculate, let’s say that that’s 100% overly optimistic, and 11% of online users would pay a monthly fee of $5 to support their favorite web content. I think Mutter is underestimating the number of people who would participate.
This whole idea will only work if Kachingle scales up massively. (Keep your fingers crossed for a Google acquisition or partnership. That could do it.)
5. My E&P column was too long. Yes, my critics are correct. Mea culpa.
Please don’t let that be the reason to dismiss this model. No one has tried the donation model applied in a user-simple manner across all manner of online content. If charging for news content on the web won’t work, and micropayment barriers will just turn legions of potential readers (and viewers of ads) away, why not put heart and soul into this “crazy” new model and see if it can work to adequately supplement web advertising?
Most news executives are so wary of jumping outside the box. C’mon, you’ve got a serious money problem and you need new solutions. Try something different!